Government urged to support British steel as firm owner says it has 'adequate funding’ after administrator fears

One of the UK’s biggest steel companies has said it has “adequate funding” for its current needs after worries were raised over around 5,000 jobs when one of its main lenders filed for administration.

Bosses at GFG Alliance, which owns Liberty Steel, met with unions on Tuesday, saying they were looking for refinancing options after the collapse of Greensill Capital.

“While Greensill’s difficulties have created a challenging situation, we have adequate funding for our current needs,” GFG said in a statement.

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It added: “Discussions to secure alternative long-term funding are progressing well but will take some time to organise. While this takes place we have asked all of our businesses to manage cash carefully.”

Stock photo of Liberty Steel. Photo: JPI Media

Representatives for the National Trade Union Steel Co-ordinating Committee called the meeting with GFG boss Sanjeev Gupta “positive and constructive”.

“It is clear Mr Gupta intends to secure a refinancing of the debt to provide the business with the necessary liquidity going forward,” they said.

“We recognise Mr Gupta’s desire to see Liberty Steel succeed, and recognise also his personal contribution in giving distressed UK steel assets a new lease of life.”

Mr Gupta has often been termed the “saviour of steel”, however his five billion dollars (£3.6 bn) in loans from Greensill sparked worries over the future of his empire, including Liberty Steel, which employs 3,000 people and has owns 12 steel plants in the UK including in Rotherham and Stocksbridge,

Greensill filed for administration on Monday after concluding it was unable to meet its debts.

“Sanjeev had a productive meeting with the unions today to discuss the plan to make the parts of the UK businesses facing weak market conditions more financially sustainable and address the disruption caused by the situation at Greensill,” GFG said.

Mr Gupta’s business has faced a 60% drop in demand for some of its products due to the impact of Covid-19 on the aeroplane building sector.

Earlier in the day, Downing Street said the reports that up to 5,000 jobs might be at risk were “very worrying for company employees”.

The Prime Minister’s official spokesman said: “We continue to follow developments closely.

“I’m not going to speculate specifically on any reports on a company’s financial situation, but we in general have been a strong advocate for the steel industry and continue to work closely with them to support the sector’s transition t a competitive, sustainable, and low carbon future.”

He said the Business Secretary Kwasi Kwarteng held a meeting with the UK Steel Council last week.

The National Trade Union called on the Government to ensure that jobs and the company are not lost.

It said: “Given the strategic importance of Liberty’s steel operations, and their fundamental importance to delivering the UK’s climate objectives, we believe Government must take an active role to facilitate a comprehensive solution that safeguards the future and protects jobs.”

Shadow minister for business and consumer Lucy Powell said: “It’s vital that the Government acts with the urgency required and doesn’t wash their hands of the situation.”

While South Yorkshire metro mayor Dan Jarvis added: “I’m hugely concerned about recent developments at Liberty Steel and the impact this could have on residents and the regional economy in South Yorkshire.

“Our economic recovery and renewal from the pandemic depends on our economy and manufacturing sector firing on all cylinders. The potential closure of these steelworks – at the cost of thousands of jobs and livelihoods – would only serve to hamper our recovery.

“The Government has a responsibility to do whatever it takes to ensure that our steel industry remains viable and to safeguard jobs at the steelworks at Stocksbridge and Parkgate.

“As mayor, I will hold their feet to the fire to protect our South Yorkshire steel industry.”

No 10 added : “We have provided more than £500m in relief to the steel sector since 2013.”